Forum Replies Created

Viewing 8 posts - 1 through 8 (of 8 total)
  • Profile photo of joeygbhjoeygbh
    Participant
    @joeygbh
    Join Date: 2007
    Post Count: 8

    What do you do with your excess cash

    I’d save it for a rainy day. Interest is the same regardless but you get to keep the cash.

    Profile photo of joeygbhjoeygbh
    Participant
    @joeygbh
    Join Date: 2007
    Post Count: 8

    How is the contract filled out incorrectly and why is this a real impediment? My sales contract from auction technically had the wrong address (same street adjoining suburb) and all it took was a couple of overwrites and initials on both our parts. My solicitor was on the ball and picked it up.

    Let them sort out what’s needed and then contact your solicitor.

    Profile photo of joeygbhjoeygbh
    Participant
    @joeygbh
    Join Date: 2007
    Post Count: 8

    Telephony is not considered an essential service, so LL and builders do not have to provide it.

    And, how much should the Property Manager take care of this?

    I don’t understand this question – how much?

    Profile photo of joeygbhjoeygbh
    Participant
    @joeygbh
    Join Date: 2007
    Post Count: 8

    While the official cash rate may be pushed down, the market rates that you can actually source funding and lend at could be much different. Hence why ANZ actively marketed that they ‘decoupled’ their rate decisions from the RBA a while back.

    If the economic climate got worse, jobs started being lost and mortgages defaulted then the relative risk rating for mortgages in Australia would be upgraded (i.e. credit rating downgrade). As a result finding sources of funding to borrow to this market would be more difficult unless you raised the amount of return they were getting (i.e. risk vs reward). No different to how lending from second tier sources and other P2P lenders have higher rates of interest now, just on a larger scale. The RBA could be doing all it can to lower rates, but if the market doesn’t believe that we can pay back our loans, the interest rates would rise regardless.

    The question is, what would cause a significant downgrade of our credit rating to such a point that creditors (those with the real money) would be unwilling to lend to Australia? Is that scenario likely to play out in the near future?

    Profile photo of joeygbhjoeygbh
    Participant
    @joeygbh
    Join Date: 2007
    Post Count: 8

    Wouldn’t that just be a loan co-applicant? You don’t have their name on the title so they don’t own the property but they are responsible for the loan as well (as a guarantor).

    The only way to get off the loan though would be for you to refinance after you are sufficient to hold the loan by yourself.

    The other alternative is of course they get the loan part of it, you pay that loan off as well and pay them on the side.

    Profile photo of joeygbhjoeygbh
    Participant
    @joeygbh
    Join Date: 2007
    Post Count: 8

    Cairnlea is one of those suburbs that benefited by what I would call the migrant shift from St Albans and Sunshine along with the northern suburbs of Sydenham etc. Basically the migrants from the late 70s, 80s and early 90s that became successful and wanted nicer homes moved out to these new estates.

    At 580k (assuming 2 storey, 4×2) it’s only grown at just above inflation for the past 10y and will probably continue to do so if everything goes well. There will be no sudden jumps in prices for that area because of its proximity to the newer estates within 5km of it.

    The demographics are mainly owner occupier so selling will probably be an easier proposition than renting, mainly to students that go to the nearby university. Considering that, I’m not sure if you’d experience a better renting outcome than what you experienced in Hoppers Crossing.

    Overall as an IP location looking for yield (average to poor), or growth (poor) I would sell out if you could afford to.

    Profile photo of joeygbhjoeygbh
    Participant
    @joeygbh
    Join Date: 2007
    Post Count: 8

    I currently live in an exdisplay home, and from an IP perspective they don’t make great investments.

    1. They are often located in areas like new estates with very high stock availability, both in rental and owner occupier. Desirability is so-so while awash with plenty of new and cheaper stock coming online for a while to come.

    2. They are generally over capitalised for the site, having a lot of bling that costs money, but doesn’t actually add value to the property.

    3. They are quite difficult to sell/rent out afterwards. They have to be priced to not lose money on, but this is often higher than the market median and so takes longer to sell or only sellable in a very strong market. We have had 5/8 in the same display block sold after the initial lease period and only one sold in a reasonable amount of time. After taking into account inflation, holding and acquisition costs, that one just broke even, the others more likely losses.
    Rental wise, they have high end finishes, but not the additions that really add to rental price.

    My house has been great as a owner occupied home, but I don’t think I would make the right sort of money selling it or renting it out even though on per sq basis it was the cheapest in the block. It’s too big to have general market interest (it’s a 50sq 4×4) and renting it for the general market is not worth the wear and tear.

    In your case, based on my experience I would sell for a minimum loss if possible and move my money elsewhere.

    Profile photo of joeygbhjoeygbh
    Participant
    @joeygbh
    Join Date: 2007
    Post Count: 8

    Hello from Melbourne Australia,

    PPOR: 300k bought for 90k 20 years ago.
    1st: 400k bought for 70k 15 years ago, 250pw rental
    2nd: 400k bought for 135k 10 years ago, 280pw rental
    3th: 620k bought 4 weeks ago, will be settled in 1 month; 1085pw rental until oct next year when it will be come PPOR
    4th: 275 bought 2 days ago, will be settled in 2 months; 250pw rental upon settlement.

    LVR ~ 43%.

    I expect to reduce the LVR to about 35% next year, and then double the portfolio in the next 5 years, to double again in the next 5 years after that. Then I plan to retire – no need to be greedy :-p

Viewing 8 posts - 1 through 8 (of 8 total)